Newsflash: if you increase the property tax millage rate, you are in fact raising taxes.

Sounds obvious, right? Not according to Florida Statue, several of our sitting County Commissioners and the editorial board of the Florida Today.

Florida’s Truth in Millage Law defines a tax increase as any tax rate that generates more revenue than the prior year as a tax increase. This definition is deeply flawed for a couple of reasons, and if applied to other tax mechanisms would leave taxpayers open to crushing tax increases across the board to maintain the size of government regardless of what is happening in the economy.

Several of our Commissioners and the Editorial Board of the Florida Today gleefully point to the Truth in Millage statute as proof the County and School Board have not raised taxes. Matt Reid just wrote about it here.

In addition to referencing the state statute, Commissioners Fisher and Nelson have repeatedly pointed out that because *not everyone’s* tax bill will increase as a result of the millage increase, rolling back the millage rate to maintain last year’s revenue isn’t actually a tax increase.

Here’s the twisted logic put forth by Commissioners Fisher at the July 21st budget workshop meeting:

Because property values are decreasing, increasing the millage rate will result in an increased tax bill for (only) between 25% and 33% of Brevard County residents. Approximately 33% saw an increase in dollars last year, in spite of the fact we were told by the Commissioners and Florida Today it was revenue “neutral” and there was no increase.

“…Not everybody’s going to get a 14.5% tax increase on their tax bill. My definition of an increase is what am I paying this year and am I paying 14% or 14.5% (more) next year,” Commissioner Robin Fisher said. “Is it fair to say that the majority of our citizens won’t see that?” Commissioner Nelson echoed Fisher’s sentiments.

Why yes, Commissioners Fisher and Nelson, it is fair to say that between two thirds and three quarters of Brevard County taxpayers will be unaffected, but that doesn’t mean it’s not a tax increase.

Let’s set aside for the moment the fact Commissioner Fisher should already know the answer to his question – if he doesn’t he certainly shouldn’t be voting on the budget or millage – and apply his (and apparently the State of Florida’s) logic to two different taxing mechanisms to see whether application of this premise would constitute a tax increase.

Using Commissioner Fisher’s stated logic, the state of Florida should adjust the 6% sales tax rate upward to reflect the drop in consumer spending from the downturn in the economy.

If Sales tax revenues are down 16% over last year (like Brevard property values and thus property tax revenues); to make the state “whole”, they should raise the sales tax to 7.14% to maintain the same level of revenue dollars to the state. Got that? Because we are looking at maintaining revenue in dollars from the government’s perspective no matter what, all of the tax rates as percentages on the citizens are subject to increase by whatever is necessary to maintain the revenue figure and thus the level of spending the government has become addicted to; even if the economy is in the toilet (which it is) and even if the county is depopulating and we don’t need to maintain the same level of services (which it is).

In the sales tax example, only the people who are still buying things are affected, right? People tighten their belts in a depressed economy - their consumption of goods and services goes down, which means they will most likely spend less in sales tax next year than they did this year. According to Commissioner Fisher, if I spend less in sales tax dollars next year than I do this year, it’s actually a decrease, right? Ummm, yeah - ok.

Let’s look at the federal income tax and apply the same logic. If income tax collections are down by 16% in gross dollars, should the Feds then increase the various tax brackets proportionately up to get the revenue back up to the dollars they took in last year? According to Florida State Statute, Commissioners Fisher and Nelson, and Matt Reid, this action would NOT constitute a tax increase. Remember, there are fewer people working now than last year because of the economic downturn, thus less will actually pay any income tax at all. There are also lots of people underemployed, making less than they were last year and thus paying less in income taxes. According to Commissioner Fisher we’ve hit the jackpot – another tax DECREASE. Right on!

What I find more disturbing than the fact grown adults would engage in such fantasy – elected officials no less – is the fact the local newspaper is happy to go along with them for the ride.

The entire premise of using government revenue as the baseline to determine whether a tax increase has occurred is both absurd and intellectually dishonest. Any sane individual, family, private sector business owner or employee understands you must cut expenses as revenues decline, or else face bankruptcy. Only in government and the mainstream media do the laws of economics not apply.

Anyone stating with a straight face that an increase in the millage rate isn't a tax increase should be ashamed of themselves.